Trickle down economics...
Last week Jeff at Archaeo Texture made the observation that from his "windshield" view, economic activity in the Permian Basin looks fairly strong. He noted that as he drives to work at the Channel 9 media center he is seeing an increased pace of truck traffic and many more happy workers at the coffee and burger joints along the way. Jeff is in the TeeVee news business and so he asked several of us with experience in the oil and gas business to confirm his observation.
To confirm his thoughts one needs to look no further than the statewide unemployment figures where, amazingly to me, Midland now has the lowest rate in Texas at around 4.4% unemployed. During periods of very low energy prices Midland has tended to be in the higher percentiles of the unemployed. Higher oil and gas prices do wonders for our economy.
When energy prices are higher things happen in the oil patch. People drill new wells, build infrastructure or like we have been doing lately, recomplete old wells to get more hydrocarbons out of well bores drilled years ago. Our operations are small potatoes compared to larger firms, but what we do illustrates how funds, cash money, are injected into the economy.
We recently recompleted the Linaka #2. For this project new money was raised and deposited in our local banks. A good portion of the funds for the work came from our partners outside the local area, some coming from Europe. This is new money for the region. As we started to work a variety of trades were employed on the well. Dirt contractors were needed to clear and level the site. Key Energy provided the rig and a crew usually numbering 5-6 "hands". Hands being paid much more than fast food wages. Fresh water trucks were needed to provide fluids for the drilling process. "Mud" specialists provided their goods to stabilize the fluids.
As we neared completion of the project specialists in varying fields were needed to insure success. People providing equipment such as "packers" and "bridge plugs", a perforating crew to blow holes from the casing into the rock and people like Ralph and Stringbean who provided us with the acid fracturing job to get the well flowing. A crew was employed to re-install the pumping unit. A steady stream of workers kept busy by this one project. We worked on the Linaka recompletion for over 3 months so probably we provided an income for 8-10 families during that period. If one factors in the support personnel [mechanics, bookkeepers, dispatchers etc.] necessary to keep these workers in the field for that period, the number is significantly higher. Multiple this times the 100's of ongoing jobs taking place in the oil field on any given day and the impact on the local ecomomy is impressive.
As Jeff noted in his windshield survey, these people are busy, so that when they left our job another was waiting...and then another. And unlike most national retail and fast food businesses who take local money and send it out of town....our "employees" spend their hard earned cash here.
Last week Jeff at Archaeo Texture made the observation that from his "windshield" view, economic activity in the Permian Basin looks fairly strong. He noted that as he drives to work at the Channel 9 media center he is seeing an increased pace of truck traffic and many more happy workers at the coffee and burger joints along the way. Jeff is in the TeeVee news business and so he asked several of us with experience in the oil and gas business to confirm his observation.
To confirm his thoughts one needs to look no further than the statewide unemployment figures where, amazingly to me, Midland now has the lowest rate in Texas at around 4.4% unemployed. During periods of very low energy prices Midland has tended to be in the higher percentiles of the unemployed. Higher oil and gas prices do wonders for our economy.
When energy prices are higher things happen in the oil patch. People drill new wells, build infrastructure or like we have been doing lately, recomplete old wells to get more hydrocarbons out of well bores drilled years ago. Our operations are small potatoes compared to larger firms, but what we do illustrates how funds, cash money, are injected into the economy.
We recently recompleted the Linaka #2. For this project new money was raised and deposited in our local banks. A good portion of the funds for the work came from our partners outside the local area, some coming from Europe. This is new money for the region. As we started to work a variety of trades were employed on the well. Dirt contractors were needed to clear and level the site. Key Energy provided the rig and a crew usually numbering 5-6 "hands". Hands being paid much more than fast food wages. Fresh water trucks were needed to provide fluids for the drilling process. "Mud" specialists provided their goods to stabilize the fluids.
As we neared completion of the project specialists in varying fields were needed to insure success. People providing equipment such as "packers" and "bridge plugs", a perforating crew to blow holes from the casing into the rock and people like Ralph and Stringbean who provided us with the acid fracturing job to get the well flowing. A crew was employed to re-install the pumping unit. A steady stream of workers kept busy by this one project. We worked on the Linaka recompletion for over 3 months so probably we provided an income for 8-10 families during that period. If one factors in the support personnel [mechanics, bookkeepers, dispatchers etc.] necessary to keep these workers in the field for that period, the number is significantly higher. Multiple this times the 100's of ongoing jobs taking place in the oil field on any given day and the impact on the local ecomomy is impressive.
As Jeff noted in his windshield survey, these people are busy, so that when they left our job another was waiting...and then another. And unlike most national retail and fast food businesses who take local money and send it out of town....our "employees" spend their hard earned cash here.
